Savings inflows surge at building societies

Building societies saw the highest February inflow of savings for more than 10 years last month, the Building Societies Association reveals.

The trade body says building societies experienced net receipts of £1.35bn in February 2008 – the highest level of February inflows since 1997.

This figure also shows an increase from £782m in savings inflows during February last year.

Brian Morris, head of savings policy at the BSA, says: “Building societies have enjoyed another strong month as high interest rates and attractive products have encouraged people to save with societies.

“The continuing economic uncertainty and volatility in stock markets have provided further incentives to put money in cash savings.”

But he adds: “Net lending by building societies is down compared to this time last year.

“This suggests the lower levels of activity in the housing market reported by the Land Registry yesterday for December are continuing into 2008.”

Building society net receipts to cash ISAs in February 2008 were £130m compared to £123m in February 2007.

Building society gross lending amounted to £3.8bn in February 2008, compared to £4.2bn in February last year.

Net lending by building societies dropped to £974m in February 2008 from £1.46bn in February 2007.

Approvals also fell to £3.41bn in February 2008 from £4.64bn in February 2007.